Correlation Between United Bankers and Remedy Entertainment
Can any of the company-specific risk be diversified away by investing in both United Bankers and Remedy Entertainment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United Bankers and Remedy Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bankers Oyj and Remedy Entertainment Oyj, you can compare the effects of market volatilities on United Bankers and Remedy Entertainment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in United Bankers with a short position of Remedy Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bankers and Remedy Entertainment.
Diversification Opportunities for United Bankers and Remedy Entertainment
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Remedy is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding United Bankers Oyj and Remedy Entertainment Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remedy Entertainment Oyj and United Bankers is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on United Bankers Oyj are associated (or correlated) with Remedy Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remedy Entertainment Oyj has no effect on the direction of United Bankers i.e., United Bankers and Remedy Entertainment go up and down completely randomly.
Pair Corralation between United Bankers and Remedy Entertainment
Assuming the 90 days trading horizon United Bankers Oyj is expected to generate 0.78 times more return on investment than Remedy Entertainment. However, United Bankers Oyj is 1.29 times less risky than Remedy Entertainment. It trades about -0.01 of its potential returns per unit of risk. Remedy Entertainment Oyj is currently generating about -0.32 per unit of risk. If you would invest 1,800 in United Bankers Oyj on August 28, 2024 and sell it today you would lose (10.00) from holding United Bankers Oyj or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bankers Oyj vs. Remedy Entertainment Oyj
Performance |
| Timeline |
| United Bankers Oyj |
| Remedy Entertainment Oyj |
United Bankers and Remedy Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bankers and Remedy Entertainment
The main advantage of trading using opposite United Bankers and Remedy Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bankers position performs unexpectedly, Remedy Entertainment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Remedy Entertainment will offset losses from the drop in Remedy Entertainment's long position.| United Bankers vs. Vaisala Oyj A | United Bankers vs. CapMan Oyj B | United Bankers vs. HKFoods Oyj A | United Bankers vs. KONE Oyj |
| Remedy Entertainment vs. Harvia Oyj | Remedy Entertainment vs. Qt Group Oyj | Remedy Entertainment vs. Kamux Suomi Oy | Remedy Entertainment vs. Revenio Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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